Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GoDaddy Inc (GDDY, Financial) reported a 29% year-over-year increase in free cash flow, demonstrating strong financial performance.
- The company achieved a 20% growth in application and commerce bookings, indicating robust demand for its services.
- Normalized EBITDA margin expanded by over 400 basis points, reflecting improved operational efficiency.
- The launch of new AI-powered features and products, such as GoDaddy Airo, has shown positive adoption trends and is driving customer engagement.
- GoDaddy Inc (GDDY) successfully reduced its fully diluted shares outstanding to 144 million through share buybacks, enhancing shareholder value.
Negative Points
- Customer count declined slightly to 20.7 million, indicating challenges in customer acquisition or retention.
- Aftermarket growth slowed significantly, with flat year-on-year performance compared to double-digit growth earlier in the year.
- The company faces tougher year-over-year comparisons for its applications and commerce segment, which may impact future growth rates.
- Despite strong financial performance, GoDaddy Inc (GDDY) plans to increase marketing investments, which could pressure margins in the short term.
- The company is still in the early stages of monetizing its Airo platform, which may delay immediate financial benefits.
Q & A Highlights
Q: Can you provide insights on the applications and commerce segment's bookings growth and its impact on future revenue?
A: Bookings acceleration can be a tailwind for revenue. The timing and product mix, such as transactional and commerce terms, influence this. We expect overall bookings to outpace revenue by about two points, driven by applications and commerce.
Q: Could you expand on the pricing and bundling strategy, especially in the core platform?
A: Pricing and bundling involve finding customer cohorts to provide value and price accordingly. We use machine learning and data to balance customer retention with pricing opportunities. This strategy will now extend to products in the core platform.
Q: What are your expectations for customer acquisition in 2025, and how does it relate to past divestitures?
A: We expect to resume customer growth as we lap divestitures and end-of-life migrations. With our strong product portfolio, we plan to increase marketing spend to attract more customers.
Q: How is the Airo initiative progressing in terms of engagement and monetization?
A: Airo focuses on discovery, engagement, and monetization. We've seen strong engagement, with 40% of websites plus marketing subscriptions originating from Airo. We plan to expand Airo's reach and introduce paywalls for additional products.
Q: Can you discuss the impact of macroeconomic factors on GoDaddy's performance?
A: We monitor macro factors closely. While there are pockets of weakness, improvements in conversion and pricing have offset these. We continue to see strong traffic and customer retention at 85%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
